Transcript Economic Freedom of the World: Annual Report 2004

Economic Freedom of the
World: 2006 Annual Report

Fraser Institute
Policy Briefing

September 7, 2006

Mark Mullins, Executive
Director

Amela Karabegovic, Senior
Research Economist
1
THANK YOU FOR
COMING!

The key to changing policy in the world is
changing the climate of opinion about what
works and what does not work in
encouraging world development
 The key to changing the climate of opinion
is providing the widest possible audience
with good information about the causes of
development and under-development
2
Economic Freedom of the
World Project

Objective: find a way to measure economic
freedom and explore the connection
between it and other variables
 20 year project
 Led by Professor Milton Friedman, Rose
Friedman and Michael Walker
 Involved 60 of the world’s top scholars
3
What is The Economic
Freedom of the World Index?
 An
annual compilation of data representing factors
which make a country economically free
 Authors: James Gwartney and Robert Lawson
 A compendium of 38 government policies affecting
economic freedom based on objective data or
independent surveys
 A ranking of 130 countries representing 93% of the
world’s population according to the extent to which
they permit their citizens to be economically free
 Now a collaboration of Institutes in 71 different
countries
4
What is Economic Freedom
Individuals have economic freedom when
property they acquire without the use of force,
fraud, or theft is protected from physical invasions
by others and they are free to use, exchange, or
give their property as long as their actions do not
violate the identical rights of others. An index of
economic freedom should measure the extent to
which rightly acquired property is protected and
individuals are engaged in voluntary transactions.
James Gwartney et al. 1996
5
Components of The Economic
Freedom of the World Index

Size of government and taxation
 Private property and the rule of law
 Soundness of Money
 Trade regulation and tariffs
 Regulation of business, labour and capital
markets
 Based entirely on objective or third party
data for 130 countries
6
Talk about making a difference …
7
Member Institutes of Economic Freedom of the World
Albanian Center for Economic
Network
Research, Albania
Fundación Libertad, Argentina
Institute of Public Affairs, Australia
TIGRA®, Austria
Center for Economic and Political
Research, Azerbaijan
The Nassau Institute, Bahamas
Making Our Economy Right (MOER),
Bangladesh
Scientific Research Mises Center,
Belarus
Centre for the New Europe, Belgium
Fundacion Libertad y Democracia
(FULIDE), Bolivia
Instituto Liberal do Rio de Janeiro,
Brazil
Institute for Market Economics,
Bulgaria
Cambodia Institute of Development
Study, Cambodia
The Fraser Institute, Canada
Instituto Libertad y Desarrollo, Chile
ILP- Instituto Libertad y Progreso,
Colombia
Instituto para la Libertad y el
Análisis de Políticas, Costa Rica
The Institute of Economics, Croatia
Liberální Institut, Czech Republic
Center for Politiske Studier (CEPOS),
Denmark
Fundación Economía y Desarrollo
Inc., Dominican Republic
Instituto Ecuatoriano de Economía
Política, Ecuador
International University Concordia
Audentes, Audentes University,
Estonia
Association pour la Liberté
Economique et le Progrès Social
(ALEPS), France
Society for Disseminating Economic
Knowledge:“New Economic School –
Georgia”, Georgia
Liberales Institut, Germany
The Institute of Economic Affairs, Ghana
Centro de Investigaciones Económicas
Nacionales, Guatemala
Institut de Recherche pour la Liberte
Economique et la Prosperite (IRLEP), Haiti
Hong Kong Centre for Economic Research,
Hong Kong
Szazadveg Foundation, Hungary
Centre for Social and Economic Research,
Iceland
Centre for Civil Society, India
The Institute for Development of Economics
and Finance, Indonesia
Open Republic Institute, Ireland
Institute for Advanced Strategic and
Political Studies, Israel
Centro Einaudi, Italy
Bureau d'Analyse d'Ingenierie et de
Logiciels (BAILO), Ivory Coast
African Research Center for Public Policy
and Market Process, Kenya
Center for Free Enterprise, Korea
Economic Policy Institute-Bishkek
Consensus, Kyrgyz Republic
Lithuanian Free Market Institute, Lithuania
D'Letzeburger Land, Luxembourg
Centro de Investigación para el Desarrollo
A.C., Mexico
Open Society Forum, Mongolia
The Center for Entrepreneurship and
Economic Development, Montenegro
The New Zealand Business Roundtable, New
Zealand
Institute of Public Policy Analysis, Nigeria
Civita – Center for Business and Society
Alternate Solutions Institute, Pakistan
Fundación Libertad, Panama
Centro de Investigación y Estudios
Legales (CITEL), Peru
The Center for Research and
Communication, Philippines
Centrum im. Adama Smitha, Poland
Causa Liberal, Portugal
Romania Think Tank, Romania
Institute of Economic Analysis, Russia
The F.A. Hayek Foundation, Slovak
Republic
The Free Market Foundation of Southern
Africa, South Africa
Pathfinder Foundation
, Sri Lanka
International Research Foundation (IRF),
Sultanate of Oman
Timbro, Sweden
Liberales Institut, Switzerland
Arthur Lok Jack Graduate School of
Business, The University of the West
Indies, Trinidad, W.I.
Association for Liberal Thinking, Turkey
The Ukrainian Center for Independent
Political Research, Ukraine
The Institute of Economic Affairs, United
Kingdom
CATO Institute, USA
The Centre for the Dissemination of
Economic Knowledge (CEDICE),
Venezuela
Research Center for Entrepreneurship and
Development Policies, Vietnam
Free Market Center (FMC), Yugoslavia
8
Zambia Institute for Public Policy Analysis
(ZIPPA), Zambia
Sample of Press Coverage for
Fraser Institute’ Economic Freedom of the World 2005
All Africa, Africa
Asia Pulse, Australia
Australian Financial Review,
Australia
Scoop, Australia
Latin America News Digest,
Brazil
Capital Weekly, Bulgaria
El Diario de Hoy, Central
America
Diario Financiero, Chile
El Financiero, Chile
Xinhua News Agency, China
South China Morning Post,
China
China Daily-Hong Kong
Edition, China
Ambiito Juridico, Colombia
Portafolio, Colombia
La Prensa Libre, Costa Rica
El Financiero, Costa Rica
Hina, Croatia
Hospodarske Noviny, Czech
Republic
Borsen, Denmark
Jyllands-Posten, Denmark
Baltic Business Weekly, Estonia
BBC Monitoring, Europe
Radio Liberty, Georgia
Frankfurter Allgemeine, Germany
Vereinigte, Germany
Financial Express, India
Hindustan Times, India
Journal of Commerce, International
El Cronista Comercial, International
El Nacional, International
International Herald Tribune,
International
Israel Business Arena, Israel
Jerusalem Post, Israel
ItaliaOggi, Italy
Il Sole, Italy
Il Giornale, Italy
Korea Times, Korea
Seoul Daily, Korea
Korea Herald, Korea
Noticias Latinoamericanas, Mexico
Agencia Mexicanan De Noticias,
Mexico
Republika, Montenegro
Financial Times Deutschland,
Netherlands
Times of Oman, Oman
Daily times, Pakistan
Rzeczpospolita, Poland
La Tribune, Canada
Montreal Gazette, Canada
Rumanian, Romania
St. Petersburg Times, Russia
Moscow Times, Russia
Interfax, Russia
Russian Publication, Russia
Plenipotentiary, Russia
Republika, Serbia/Montenegro
Vijesti, Serbia/Montenegro
Pobjeda, Serbia/Montenegro
Straits Times, Singapore
Ekonomicka Sloboda, Slovakia
Hodin Daily, Slovakia
Pravda Daily, Slovakia
Business Day, South Africa
El Economista, Spain
Libertad Digital, Spain
L'Agefl Suisse, Switzerland
Bangkok Post, Thailand
Trinidad Guardian, Trinidad & Tobago
Financial Times, UK
Investor's Business Daily, US
9
Financial Times, US
10
Introducing the 2006 Economic
Freedom of the World Index Results
11
Overall Economic Freedom Index
and the Top 10
Hong Kong
Singapore
United States
Switzerland
New Zealand
Average of Top 10
United Kingdom
Ireland
Canada
Luxembourg
Iceland
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
12
The top 10 and how they got there
Canada
20
Hong Kong
40
Ireland
Iceland
Luxembourg
New Zealand
60
Singapore
80
Switzerland
United Kingdom
100
United States
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
0
Average of Top 10
13
Source: The Fraser Institute.
Countries having significant
improvement since 1970
Uganda
Jamaica
Estonia
Sweden
Israel
El Salvador
United Kingdom
Hungary
Kuwait
Chile
20
40
60
80
100
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
0
14
Source: The Fraser Institute.
Countries having significant
deterioration since 1970
Venezuela
Pap. New Guinea
20
Dominican Rep.
40
Mali
Nepal
60
Cameroon
Niger
80
Paraguay
100
Malawi
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
0
Bahrain
15
Source: The Fraser Institute.
Overall Economic Freedom Index
and the Bottom Ten
Rwanda
Central Afr. Rep.
Burundi
Guinea-Bissau
Algeria
Venezuela
Congo, Rep. Of
Congo, Dem. R.
Myanmar
Zimbabwe
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
16
Economic Freedom Over Time
Economic Freedom Score
10
8
6
5.7
5.2
5.1
5.2
1975
1980
1985
5.5
5.9
6.4
6.4
6.4
6.4
6.5
2000
2001
2002
2003
2004
4
2
0
1970
1990
1995
17
Source: The Fraser Institute.
Economic Freedom Over Time Adjusted
for Population
Economic Freedom Score
10
8
6
5.5
4.9
4.8
5.0
5.1
1975
1980
1985
1990
6.2
6.2
6.2
6.3
6.3
2000
2001
2002
2003
2004
5.6
4
2
0
1970
1995
18
Source: The Fraser Institute.
Economic Freedom and the Top 10
19
Size of Government and the Top 10
Hong Kong
Singapore
United States
Switzerland
Average of Top 10
Iceland
New Zealand
United Kingdom
Canada
Ireland
Luxembourg
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
20
Size of Government and the Top 10
1970 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004
10
Canada
Score (out of 10)
Hong Kong
8
Iceland
Ireland
Luxembourg
6
New Zealand
Singapore
4
Switzerland
United Kingdom
2
United States
Average of Top 10
0
21
Source: The Fraser Institute.
Size of Government and the Top 10
0
Hong Kong
20
Iceland
Ireland
40
Luxembourg
New Zealand
60
Singapore
Switzerland
80
United Kingdom
United States
100
Average of Top 10
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
Canada
22
Source: The Fraser Institute.
Legal System and Property Rights
and the Top 10
New Zealand
Iceland
United Kingdom
Ireland
Switzerland
Luxembourg
Average of Top 10
Canada
Singapore
United States
Hong Kong
0
2
Source: The Fraser Institute.
4
6
Score (out of 10)
8
10
23
Legal System and Property Rights
and the Top 10
1970 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004
10
Score (out of 10)
Canada
Hong Kong
8
Iceland
Ireland
6
Luxembourg
New Zealand
Singapore
4
Switzerland
United Kingdom
2
United States
Average of Top 10
0
24
Source: The Fraser Institute.
Legal System and Property Rights
and the Top 10
Canada
Hong Kong
20
Iceland
Ireland
40
Luxembourg
New Zealand
60
Singapore
Switzerland
80
United Kingdom
United States
100
Average of Top 10
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
0
25
Source: The Fraser Institute.
Sound Money and the Top 10
United States
Ireland
Switzerland
Luxembourg
Singapore
Canada
New Zealand
Average of Top 10
United Kingdom
Hong Kong
Iceland
0
2
Source: The Fraser Institute.
4
6
Score (out of 10)
8
10
26
Sound Money and the Top 10
1970 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004
10
Score (out of 10)
Canada
Hong Kong
8
Iceland
Ireland
6
Luxembourg
New Zealand
Singapore
4
Switzerland
United Kingdom
2
United States
Average of Top 10
0
27
Source: The Fraser Institute.
Sound Money and the Top 10
0
Hong Kong
20
Iceland
Ireland
40
Luxembourg
New Zealand
60
Singapore
Switzerland
80
United Kingdom
United States
100
Average of Top 10
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
Canada
28
Source: The Fraser Institute.
Freedom to Trade Internationally
and the Top 10
Hong Kong
Singapore
Luxembourg
Ireland
Average of Top 10
New Zealand
United Kingdom
Canada
Switzerland
United States
Iceland
0
2
Source: The Fraser Institute.
4
6
Score (out of 10)
8
10
29
Freedom to Trade Internationally
and the Top 10
1970 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004
10
Canada
Score (out of 10)
Hong Kong
8
Iceland
Ireland
6
Luxembourg
New Zealand
Singapore
4
Switzerland
United Kingdom
2
United States
Average of Top 10
0
30
Source: The Fraser Institute.
Freedom to Trade Internationally
and the Top 10
Canada
Hong Kong
20
Iceland
Ireland
40
Luxembourg
New Zealand
60
Singapore
Switzerland
80
United Kingdom
United States
100
Average of Top 10
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
0
31
Source: The Fraser Institute.
Regulations and the Top 10
Iceland
Hong Kong
United States
New Zealand
Canada
Average of Top 10
Switzerland
United Kingdom
Singapore
Luxembourg
Ireland
0
2
Source: The Fraser Institute.
4
6
Score (out of 10)
8
10
32
Regulations and the Top 10
1970 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004
10
Canada
Score (out of 10)
Hong Kong
8
Iceland
Ireland
6
Luxembourg
New Zealand
Singapore
4
Switzerland
United Kingdom
2
United States
Average of Top 10
0
33
Source: The Fraser Institute.
Regulations and the Top 10
0
Hong Kong
20
Iceland
Ireland
40
Luxembourg
New Zealand
60
Singapore
Switzerland
80
United Kingdom
United States
100
Average of Top 10
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
Canada
34
Source: The Fraser Institute.
Credit Market Regulations
and the Top 10
New Zealand
United States
United Kingdom
Iceland
Luxembourg
Canada
Average of Top 10
Hong Kong
Switzerland
Ireland
Singapore
0
2
Source: The Fraser Institute.
4
6
Score (out of 10)
8
10
35
Credit Market Regulations
and the Top 10
1970 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004
10
Canada
Score (out of 10)
Hong Kong
8
Iceland
Ireland
6
Luxembourg
New Zealand
Singapore
4
Switzerland
United Kingdom
2
United States
Average of Top 10
0
36
Source: The Fraser Institute.
Credit Market Regulations
and the Top 10
0
Hong Kong
20
Iceland
Ireland
40
Luxembourg
New Zealand
60
Singapore
Switzerland
80
United Kingdom
United States
100
Average of Top 10
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
Canada
37
Source: The Fraser Institute.
Labor Market Regulations
and the Top 10
Hong Kong
Iceland
United States
Switzerland
Average of Top 10
Canada
United Kingdom
Singapore
New Zealand
Ireland
Luxembourg
0
2
4
6
8
10
Score (out of 10)
38
Source: The Fraser Institute.
Labor Market Regulations
and the Top 10
1970 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004
10
Canada
Score (out of 10)
Hong Kong
8
Iceland
Ireland
6
Luxembourg
New Zealand
Singapore
4
Switzerland
United Kingdom
2
United States
Average of Top 10
0
39
Source: The Fraser Institute.
Labor Market Regulations
and the Top 10
Canada
Hong Kong
20
Iceland
Ireland
40
Luxembourg
New Zealand
60
Singapore
Switzerland
80
United Kingdom
United States
100
Average of Top 10
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Percentile Ranks
0
40
Source: The Fraser Institute.
Business Regulations
and the Top 10
Iceland
Singapore
New Zealand
Hong Kong
Average of Top 10
Canada
Ireland
Luxembourg
Switzerland
United States
United Kingdom
0
2
Source: The Fraser Institute.
4
6
Score (out of 10)
8
10
41
Why is Economic Freedom
Important?

Economic rights are fundamental rights in
the sense that without them there can be no
political freedom or civil freedoms
 They are a prerequisite for growth and
development
 They are a prerequisite for broader human
development
42
The impact on economic
growth and development
43
Income (per person) of the
Bottom Ten
Algeria
Venezuela, RB
Zimbabwe
Togo
Rwanda
Central African Republic
Congo, Rep.
Guinea-Bissau
Congo, Dem. Rep.
Burundi
0
10,000
20,000
30,000
40,000
50,000
60,000
GDP per Capita, 2004 (ppp)
Sources: The Fraser Institute; The World Bank, World Development Indicators
CD-ROM, 2006.
44
Income (per person) of the Top 10
Luxembourg
United States
Ireland
Iceland
Switzerland
Canada
Hong Kong, China
United Kingdom
Singapore
New Zealand
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
GDP per Capita, 2004 (ppp)
Sources: The Fraser Institute; The World Bank, World Development Indicators45
CD-ROM, 2006.
Per Capita Income and Economic
Freedom Quartile
GDP Per Capita
(ppp), 2003
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free …………… Most Free
Sources: The Fraser Institute; The World Bank, World Development
Indicators CD-ROM, 2005.
46
GDP Per Capita % Growth,
1994-2003
Growth in Real GDP Per Capita
and Economic Freedom Quartile
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free ……………..….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators47
CD-ROM, 2005.
Economic Freedom and
Unemployment
Total Unemployment (% of
total labor force), 2000-2002
15.0
12.0
9.0
6.0
3.0
0.0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free ……………..….. Most Free
Sources: The Fraser Institute; The World Bank, World Development
Indicators CD-ROM, 2005.
48
New research:
Economic Freedom and Foreign Aid
49
Economic Freedom and Foreign Aid:

Millennium Development Goals
 Halving poverty by 2015

Lack of empirical evidence on the effectiveness
of aid
50
Economic Freedom and
Foreign Aid:
Background:
 As of 2000, approximately 75% of world’s poor live in
Africa

In 1970, less than 15 percent of world’s poor lived in the
region

From 1970 to 2000, Africa received $400 billions in
foreign aid

Aid has growth continuously from 5% of GNI to 18% in
51
1995 when it peaked.
Economic Freedom and Foreign Aid:
New Research by professor William Easterly:

Foreign aid has no positive impact on economic
growth in poor nations

This indicates that the “push” from foreign aid is
ineffective in breaking the poverty trap

Easterly shows that once economic freedom is
controlled for, poor nations grow faster than rich
nations
52
Policy Implications:

Efforts to reduce poverty may not produce
the results

Policy should be to promote economic
freedom

Economic freedom has been shown to
promote economic prosperity (and many
other good outcomes)
53
Economic Freedom,the Poor, and
Inequality
54
Human Poverty Index and
Economic Freedom Quartile
Human Poverty Index
40
35
30
25
20
15
10
5
0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free …………..…. Most Free
Sources: The Fraser Institute; United Nations Development Programmme, Human
Development Indicators 2005, available at
http://hdr.undp.org/statistics/data/index_indicators.cfm.
55
Income Share of the Poorest 10% and
Income Share Held by
Lowest 10%, 1999-2003
Economic Freedom
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Least Free
Quartile
3rd
Quartile
2nd
Quartile
Most Free
Quartile
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators CDROM, 2005.
56
Per Capita Income of Poorest 10%
and Economic Freedom
Income held by lowest 10%
Income share held by lowest 10%
$7,000
3.0
$6,000
2.5
$5,000
2.0
$4,000
1.5
$3,000
1.0
$2,000
$1,000
0.5
$0
0.0
Least Free Quartile
3rd Quartile
2nd Quartile
Most Free Quartile
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators57
CD-ROM, 2005.
Economic Freedom,
Other Freedoms and
Democracy
58
Economic Freedom Versus Corruption
Higher value indicates lower level of corruption
Corruption Rating
(out of 10)
10
8
6
4
2
0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free ………….. Most Free
Sources: The Fraser Institute; Transparency International, Corruption Perceptions Index
2005, available at http://www.transparency.org.
59
Economic Freedom and Political Rights
Lower ratings indicate higher level of political rights
Political Rights
(out of 10)
5.0
4.0
3.0
2.0
1.0
0.0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free ……………. Most Free
Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings,
1972 through 2004, available at http://www.freedomhouse.org/.
60
Economic Freedom and Civil Liberties
Lower ratings indicate higher level of civil liberties
Civil Liberties
(out of 10)
5.0
4.0
3.0
2.0
1.0
0.0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free …….. Most Free
Sources: The Fraser Institute; Freedom House, Freedom in the World Country
Ratings, 1972 through 2004, available at http://www.freedomhouse.org/.
61
The impact of Economic Freedom on
the UN’s Human Development Index
and other indicators of well-being
62
United Nations
Human Development
Index
Human Development Index and
Economic Freedom Quartiles
1.0
0.8
0.6
0.4
0.2
0.0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free ……………. Most Free
Sources: The Fraser Institute; United Nations Development Programmme, Human
Development Indicators 2005, available at http://hdr.undp.org/.
63
Life Expectancy at Birth and
Economic Freedom Quartiles
80
Years
60
40
20
0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free ……………. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators CD-
ROM, 2005.
64
Per 1,000 live births, 2003
Infant Mortality and Economic
Freedom Quartile
80
60
40
20
0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free ………..…. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators
CD-ROM, 2005.
65
Economic Freedom and Labor force,
children 10-14 (% of age group)
Percentage of children
10-14 who are in the
labour force
30
25
20
15
10
5
0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free ……………. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators
CD-ROM, 2005.
66
% of Population Using Improved
Water Sources
100
Percentage
80
60
40
20
0
Least Free
Quartile
3rd Quartile
2nd Quartile
Most Free
Quartile
Least Free …………….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators
CD-ROM, 2005.
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Economic Freedom and Happiness
Causes of Happiness, 68 nation study
Variables included:
Income
Economic Growth
Inflation
Unemployment
Education
Political freedom
Only two variables had large effects:
Economic Freedom
Life Expectancy
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Economic Freedom and Happiness
69
Conclusions
Economic Freedom

Increases prosperity for all
 Reduces poverty
 Increases other freedoms
 Improves quality of life
All this can be seen in today’s data
and lessons from history
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www.freetheworld.com
www.fraserinstitute.ca
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